Looking at the topline numbers doesn't give us much evidence that we've made any progress in solving the homebuilding problem. In 2005, we started almost 2.1 million homes nationally. That fell all the way down to just over 550,000 in 2009. From there, we saw a disappointing 6 percent increase to fewer than 590,000 housing starts in 2010, and the 2011 numbers showed no improvement over 2010.

So six years into a housing recession, and almost three years since hitting bottom, we still haven't seen a meaningful recovery. Housing prices continue to decline in most markets across the country, the number of homes in foreclosure is rising, and more than 20 percent of homeowners with mortgages still owe more on their mortgage than their home is worth.

Where's the progress? Why is there any reason to think that 2012 will be any better than the past three years?

A recovery is a process, not an event, and in this case the housing recovery is an agonizingly slow process. However, there are positive signs; signs that the years ahead will take us back toward the historical long-term trend of building around 1.7 million homes a year.

At the top of the list of progress made is that the production of homes has gotten back in line with long-term trends in housing demand. Over the last 10 years, we've seen about 14.7 million housing completions (site-built, manufactured and modular homes). This is well below the average 10 year total of 17.2 million completions dating back to the mid-1970s when the government began tracking all of these segments of the housing market. In fact, over the time that this data has been available, we've never seen a 10-year period where total production was this low.

Lower levels of production have begun to help work off some of the excess housing inventory that was built up during the housing boom. By 2009, there were almost 3.5 million more vacant units than normal in the national housing stock. Since then, the number of vacant units has declined, although it is still very high by historical standards.

Not only has there been progress in reining in the supply of homes, but consumer demand for homes has begun to improve. The number of net new households that are formed in the country is critical to the health of the housing industry, because each additional household requires an additional housing unit. While we were generating about 1.3 million new households a year during the 2000-2005 period, that dropped off to 300,000 by 2008 during the depths of the recession. We're back up to a pace of 800,000 per year through the first half of 2011, but these numbers need to go higher before housing can fully recover.

Also, even though home foreclosures continue to rise, the number of owners who are delinquent in their mortgage payments has been declining since early 2010. This suggests that fewer homes will be entering the foreclosure process, and therefore that the home foreclosure rate will begin slowing in the near future.

Finally, housing is more affordable to potential buyers than it has been in years. The combination of falling house prices and record low mortgage rates means that households who can piece together a down payment and qualify for more stringent mortgage financing are finding some real bargains on the market at present.

So, even though we haven't seen much improvement in the national home building numbers recently, we have been making progress. Most forecasters see modest improvement in 2012; housing starts are projected to be in the 700,000 to 750,000 range this coming year. However, it's likely to be at least 2015 before home building returns to its long term trend of 1.7 million housing starts annually. Still, we have begun to turn the corner; it's just that we're turning it so slowly that many of us haven't realized it yet.